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Donner Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The A budget of estimated unit production.production budget for March for the two rackets is as follows:

Junior Pro Striker
Production budget 6,200 units 22,200 units

Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:

Forming Department Assembly Department
Junior 0.20 hour per unit 0.50 hour per unit
Pro Striker 0.30 hour per unit 0.70 hour per unit

The direct labor rate for each department is as follows:

Forming Department $18.00 per hour
Assembly Department $13.00 per hour

Prepare the direct labor cost budget for March. Enter all amounts as positive numbers.

DONNER RACKET COMPANY
Direct Labor Cost Budget

For the Month Ending March 31

Forming Department Assembly Department
Hours required for production:
Junior
Pro Striker
Total
Hourly rate $ $
Total direct labor cost $ $

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Casey Durgan
Casey DurganLv2
28 Sep 2019

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Static Budget vs. Flexible Budget

The production supervisor of the Machining Department forRodriguez Company agreed to the following monthly static budget forthe upcoming year:

Rodriguez Company

Machining Department Monthly Production Budget

Wages $384,000

Utilities 36,000

Depreciation 60,000

Total $480,000

The actual amount spent and the actual units produced in thefirst three months of 2016 in the Machining Department were asfollows:

Amount Spent Units Produced

January $400,000 90,000

February 440,000 100,000

March 470,000 110,000

The Machining Department supervisor has been very pleased withthis performance because actual expenditures for January–March havebeen less than the monthly static budget of $480,000. However, theplant manager believes that the budget should not remain fixed forevery month but should “flex” or adjust to the volume of work thatis produced in the Machining Department. Additional budgetinformation for the Machining Department is as follows:

Wages per hour $16.00

Utility cost per direct labor hour $1.50

Direct labor hours per unit 0.20

Planned monthly unit production 120,000

Static Budget vs. Flexible Budget

The production supervisor of the Machining Department forRodriguez Company agreed to the following monthly static budget forthe upcoming year:

Rodriguez Company
Machining Department
Monthly Production Budget
Wages $384,000
Utilities 36,000
Depreciation 60,000
Total $480,000

The actual amount spent and the actual units produced in thefirst three months of 2016 in the Machining Department were asfollows:

Amount Spent Units Produced
January $400,000 90,000
February 440,000 100,000
March 470,000 110,000

The Machining Department supervisor has been very pleased withthis performance because actual expenditures for January–March havebeen less than the monthly static budget of $480,000. However, theplant manager believes that the budget should not remain fixed forevery month but should “flex” or adjust to the volume of work thatis produced in the Machining Department. Additional budgetinformation for the Machining Department is as follows:

Wages per hour $16.00
Utility cost per direct labor hour $1.50
Direct labor hours per unit 0.20
Planned monthly unit production 120,000

X

Part A: Flexible Budget

a. Prepare a flexible budget for the actualunits produced for January, February, and March in the MachiningDepartment. Assume depreciation is a fixed cost. If required, useper unit amounts carried out to two decimal places. Enter allamounts as positive numbers.

Rodriguez Company-Machining Department
Flexible Production Budget
Forthe Three Months Ending March 31, 2016
January February March
Units of production 90,000 100,000 110,000
Wages $ $ $
Utilities
Depreciation
Total $ $ $
Supportingcalculations:
Units of production 90,000 100,000 110,000
Hours per unit x x x
Total hours ofproduction
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours ofproduction
Utility costs perhour x $ x $ x $

Total utilities

Static Budget vs. Flexible Budget

The production supervisor of the Machining Departmentfor Rodriguez Company agreed to the following monthly static budgetfor the upcoming year:

Rodriguez Company
Machining Department
Monthly Production Budget
Wages $384,000
Utilities 36,000
Depreciation 60,000
Total $480,000

The actual amount spent and the actual units produced inthe first three months of 2016 in the Machining Department were asfollows:

Amount Spent Units Produced
January $400,000 90,000
February 440,000 100,000
March 470,000 110,000

The Machining Department supervisor has been verypleased with this performance because actual expenditures forJanuary–March have been less than the monthly static budget of$480,000. However, the plant manager believes that the budgetshould not remain fixed for every month but should “flex” or adjustto the volume of work that is produced in the Machining Department.Additional budget information for the Machining Department is asfollows:

Wages per hour $16.00
Utility cost per direct labor hour $1.50
Direct labor hours per unit 0.20
Planned monthly unit production 120,000

X

Part A: Flexible Budget

a. Prepare a flexible budget for the actual unitsproduced for January, February, and March in the MachiningDepartment. Assume depreciation is a fixed cost. If required, useper unit amounts carried out to two decimal places. Enter allamounts as positive numbers.

Rodriguez Company-Machining Department
Flexible Production Budget
Forthe Three Months Ending March 31, 2016
January February March
Units of production 90,000 100,000 110,000
Wages $ $ $
Utilities
Depreciation
Total $ $ $
Supportingcalculations:
Units of production 90,000 100,000 110,000
Hours per unit x x x
Total hours ofproduction
Wages per hour x $ x $ x $
Total wages $ $ $
Total hours ofproduction
Utility costs perhour x $ x $ x $
Total utilities $ $ $

X

Part B: Decision Analysis

b. Compare the flexible budget with the actualexpenditures for the first three months. Enter all amounts aspositive numbers.

January February March
Total flexible budget $ $ $
Actual cost
Excess of actual cost over budget $ $ $

What does this comparison suggest?

The Machining Department has performed better than originallythought.
The department is spending more than would be expected.

The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows:

a. Estimated sales for July by sales territory:

Maine:
Backyard Chef 310 units at $700 per unit
Master Chef 150 units at $1,200 per unit
Vermont:
Backyard Chef 240 units at $750 per unit
Master Chef 110 units at $1,300 per unit
New Hampshire:
Backyard Chef 360 units at $750 per unit
Master Chef 180 units at $1,400 per unit

b. Estimated inventories at July 1:

Direct materials:
Grates 290 units
Stainless steel 1,500 lbs.
Burner subassemblies 170 units
Shelves 340 units
Finished products:
Backyard Chef 30 units
Master Chef 32 units

c. Desired inventories at July 31:

Direct materials:
Grates 340 units
Stainless steel 1,800 lbs.
Burner subassemblies 155 units
Shelves 315 units
Finished products:
Backyard Chef 40 units
Master Chef 22 units

d. Direct materials used in production:

In manufacture of Backyard Chef:
Grates 3 units per unit of product
Stainless steel 24 lbs. per unit of product
Burner subassemblies 2 units per unit of product
Shelves 4 units per unit of product
In manufacture of Master Chef:
Grates 6 units per unit of product
Stainless steel 42 lbs. per unit of product
Burner subassemblies 4 units per unit of product
Shelves 5 units per unit of product

e. Anticipated purchase price for direct materials:

Grates $15 per unit
Stainless steel $6 per lb.
Burner subassemblies 110 per unit
Shelves $10 per unit

f. Direct labor requirements:

Backyard Chef:
Stamping Department 0.50 hr. at $17 per hr.
Forming Department 0.60 hr. at $15 per hr.
Assembly Department 1.00 hr. at $14 per hr.
Master Chef:
Stamping Department 0.60 hr. at $17 per hr.
Forming Department 0.80 hr. at $15 per hr.
Assembly Department 1.50 hrs. at $14 per hr.

Required:

1. Prepare a sales budget for July.

Gourmet Grill Company
Sales Budget
For the Month Ending July 31
Product and Area Unit Sales
Volume		 Unit Selling
Price		 Total Sales
Backyard Chef:
Maine
Vermont
New Hampshire
Total
Master Chef:
Maine
Vermont
New Hampshire
Total
Total revenue from sales

2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Gourmet Grill Company
Production Budget
For the Month Ending July 31
Units
Backyard Chef Master Chef
Expected units to be sold
Desired inventory, July 31
Total units available
Estimated inventory, July 1
Total units to be produced

3. Prepare a direct materials purchases budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Gourmet Grill Company
Direct Materials Purchases Budget
For the Month Ending July 31
Grates
(units)		 Stainless Steel
(lbs.)		 Burner Sub-
assemblies
(units)		 Shelves
(units)		 Total
Required units for production:
Backyard Chef
Master Chef
Desired inventory, July 31
Total
Estimated inventory, July 1
Total units to be purchased
Unit price
Total direct materials to be purchased

4. Prepare a direct labor cost budget for July.

Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
Stamping
Department		 Forming Department Assembly Department Total
Hours required for production:
Backyard Chef
Master Chef
Total
Hourly rate
Total direct labor cost

The management of Firebolt Industries Inc. manufactures gasolineand diesel engines through two production departments, Fabricationand Assembly. Management needs accurate product cost information inorder to guide product strategy. Presently, the company uses asingle plantwide factory overhead rate for allocating factoryoverhead to the two products. However, management is consideringthe multiple production department factory overhead rate method.The following factory overhead was budgeted for Firebolt:

1

Fabrication Department factory overhead

$614,800.00

2

Assembly Department factory overhead

246,750.00

3

Total

$861,550.00

Direct labor hours were estimated as follows:

Fabrication Department 5,300 hours
Assembly Department 5,250
Total 10,550 hours

In addition, the direct labor hours (dlh) used to produce a unitof each product in each department were determined from engineeringrecords, as follows:

ProductionDepartments GasolineEngine DieselEngine
Fabrication Department 2.9 dlh 1.8 dlh
Assembly Department 1.8 2.9
Direct labor hours perunit 4.7 dlh 4.7 dlh
Required:

a. Determine the per-unit factory overhead allocated to thegasoline and diesel engines under the single plantwide factoryoverhead rate method, using direct labor hours as the activity base. If required, round all per-direct labor hours and per-unitanswers to the nearest cent.

Gasoline engine per unit
Diesel engine per unit

b. Determine the per-unit factory overhead allocated to thegasoline and diesel engines under the multiple productiondepartment factory overhead rate method, using direct labor hoursas the activity base for each department. If required, round allper-unit answers to the nearest cent.

Gasoline engine per unit
Diesel engine per unit
c. (1) Recommend to management aproduct costing approach, based on your analyses in (a) and (b).(2) Give a reason for your answer.
*If required, round allper-unit answers to the nearest cent.

PLEASE MAKE THE ANSWERS UNDERSTANDABLE. THANKS


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